Your 2020 contributions of $1,750 are not eligible to be deducted?
Are you not covered by a high-deductible health plan?
The software will likely conclude that you have an excess contribution that may be:
- Withdrawn in part,
- Withdrawn in full, or
- Subject to an extra tax of 6%.
The remedy is generally to withdraw the $1,750 by May 17 from the plan so as to avoid the 6% penalty.
If you are not covered by a high-deductible health plan, you should make no more contributions to your health savings account.
To be eligible to contribute to an Health Savings Account in 2020, you:
- Must have been covered by a high-deductible health plan (HDHP);
- Did not have Medicare or other secondary health insurance policy; and
- Were not eligible to be claimed as a dependent on another return, no matter if you were claimed or not.
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